Navigating the regulatory response to fintech’s disruption of the financial services industry

Our lawyers understand the regulatory challenges fintech companies face as they stir disruptions in the financial services and banking industries, changing the way people spend, invest, and lend money.

We bridge the gap between emerging technologies and fintech regulations that are slow to adapt. In the process, we help companies leverage new technology and find market opportunities in an increasingly competitive environment. 

Our fintech lawyers work across offices in the United States, Europe and Asia. We draw on decades of experience to advise key players in the biggest global fintech markets. Clients relying on our solutions range from large financial institutions with operations spanning many countries to entrepreneurial companies launching their businesses in a single jurisdiction.

Our areas of specialization include:

Blockchain and Digital Assets

Our fintech lawyers are at the forefront of sophisticated transactions involving cryptocurrency and digital assets, helping increase the efficiency, accuracy and value of those transactions. We know blockchain – you can find our analyses in the Cryptocurrency and Blockchain Resources Center – and are well-equipped to address the regulatory issues faced by fintech firms disrupting the financial services and banking industries. Our efforts include helping clients leverage the benefits of distributed ledger technology (DLT) to innovate and re-envision how financial instruments and investment products can be constructed.

Alternative Loans and Finance

Borrowers and lenders have new ways of connecting in the marketplace, creating opportunities for private investors, small and medium-sized enterprises and institutional investors. Our fintech lawyers know the legal framework and familiar structures employed (144A, Reg D, S1), as well as the key differences as digital and tokenized securities bring new asset types to the markets. With extensive experience in marketplace lending and capital market structures, we guide established and emerging fintech clients as they execute sophisticated structured finance and securitization transactions — helping them comply with regulatory responses and challenges to fintech in the process.

Electronic Financial Services

Our lawyers represent providers and consumers on legal issues connected to electronic transactions, online investment advisers and marketplace lenders. We have an overview of legal, statutory, contractual and strategic issues that stem from using data analytics and machine learning to collect, develop and monetize financial data. Our global team offers perspectives on legal matters and regulatory responses to fintech that vary from one jurisdiction to another. We also share insight into customer behavior and the cultural mindset in different regions.

Electronic Trading Activities

Dechert’s fintech lawyers advise clients on legal and regulatory issues, including compliance with securities laws and regulations, and intellectual property protection. We also assist with privacy and data protection related to offering direct market access and directed brokerage, developing proprietary trading algorithms, and operating alternative trading systems and securities exchanges. In addition, we regularly represent clients seeking to invest in electronic trading firms and their technology.

More Services

In addition to the areas above, we advise on business-critical matters related to:

  • Consumer financial services
  • Compliance with public and private regulatory requirements
  • Cybersecurity compliance advice, analytics and litigation
  • Data privacy compliance advice, analytics and litigation
  • Domestic and international tax
  • Fund and investment adviser formation and related regulatory matters
  • Government enforcement, investigations and examinations
  • IP advice, protections, licensing and litigation
  • Software-as-a-service and data monetization
  • Data Protection Laws
  • Joint ventures, strategic alliances and outsourcings
  • Mergers and acquisitions
  • Private equity and venture capital transactions
  • Registration as alternative trading systems and broker-dealers
  • Securities litigation
  • Structured finance and securitization
  • Technology and software disputes

Our Track Record
Our clients include companies, platforms, technologists, investment managers and funds, banks, broker-dealers, exchanges, and private equity and venture capital investors. We work extensively with alternative trading systems, high frequency and algorithmic trading firms, digital investment advisers, data companies and other financial services innovators.
Here are examples of how we helped clients:

  • A consumer payments fintech company in responding to a civil investigative demand (CID) from the CFPB.
  • A digital asset and technology company with respect to the establishment of a de novo special purpose national bank charter.
  • Affirm, Inc., Avant, Inc., Carvana Co., BFS Capital, Inc., Enova International, Inc.and, LLC in connection with bank partnership arrangements; whole loan sale and forward flow programs; 144A securitization transactions; and warehouse and term financing facilities.
  • A global financial services institution in connection with the establishment of a business to provide digital credentials and authentication services. We advised on strategies for the protection of core technologies and for the commercialization of products and services. We also prepared and negotiated agreements relating to the development of the digital technologies, partnering agreements with third parties to support the exploitation and commercialization of the technology, and customer and user services agreements.
  • A hedge fund in its complex settlement agreement with a software developer with respect to the ownership of high-frequency trading software and the underlying algorithms used to make trades using the software.
  • A major fintech company in an inquiry regarding money transmission licensing requirements.
  • A private equity firm in its investment in a global electronic trading firm.
  • A U.S. start-up in its registration with the SEC and membership in FINRA as the  first broker-dealer approved to operate an alternative trading system to trade U.S. Treasury securities.
  • Blackboard Inc., a leading global educational software company and an affiliate of Providence Equity Partners, in its US$260 million acquisition by tender offer of Higher One Holdings Inc., a NYSE-listed financial technology company and the 2019 sale of its Blackboard Transact business unit to Reverence Capital Partners, LP.
  • Certain large mutual funds complexes and their boards of directors with respect to the acquisition by the funds of residential mortgage loans.
  • Figure Technologies, Inc. on the US$20 million security token offering successfully completed by Provenance Blockchain, Inc.
  • Figure Technologies, Inc. on its closing of a US$1 billion asset-based financing facility custodied on its blockchain.
  • Fund managers in connection with loan purchases and financing facilities related to loans originated on platforms sponsored by Lending Club, SoFi, Freedom Plus, Square, CommonBond, Funding Circle U.S., Funding Circle U.K., Upstart and others.
  • Interactive Brokers Group, an automated global electronic market-maker and broker that operates in more than 60 electronic exchanges and trading venues around the world, in its US$1.2 billion initial public offering. This represented the second largest IPO (at the time of issuance) in 2007. Beyond its significant size, the transaction was noteworthy because: it was conducted through a non-traditional “best efforts”/Dutch auction approach.
  • JetPay, a provider of end-to-end payment processing and Human Capital Management solutions, on its US$184 million sale to NCR Corporation.
  • Morgan Stanley Investment Management in the establishment of AIP Alternative Lending Fund A and AIP Alternative Lending Fund P - registered closed-end funds organized primarily to acquire marketplace loans.
  • Multiple alternative trading systems regarding compliance with Regulations ATS and NMS and responses to the SEC and FINRA in connection with SEC and FINRA examinations.
  • Conduct comprehensive reviews of electronic order routing by multiple stock and options exchanges for compliance with Regulation NMS’s trade-through rule.
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